Oil prices advanced close to 2% on Tuesday, building on the previous session’s gains, as there were few signs of progress in resolving the U.S.-Iran conflict. The continued closure of the Strait of Hormuz has kept a significant portion of Middle Eastern energy supplies restricted from global markets.
A U.S. official said on Monday that President Donald Trump is dissatisfied with Iran’s latest proposal to end the war. According to Iranian sources, the proposal avoids addressing Tehran’s nuclear program until fighting stops and maritime disputes in the Gulf are settled.
Trump’s rejection of the proposal has left negotiations at an impasse. Iran continues to restrict shipping through the Strait of Hormuz—responsible for roughly 20% of global oil and gas flows—while the U.S. maintains its blockade on Iranian ports.
Brent crude futures for June rose $2.32, or 2.1%, to $110.55 a barrel as of 0638 GMT, after gaining 2.8% in the previous session to its highest close since April 7. The contract is now on track for a seventh consecutive day of gains.
U.S. West Texas Intermediate (WTI) crude for June climbed $1.80, or 1.9%, to $98.17 a barrel, following a 2.1% increase in the prior session.
An earlier round of talks between Washington and Tehran collapsed last week after direct negotiations failed.
“Talks around ‘peace’ still look largely superficial and lack concrete evidence of de-escalation. Despite the rhetoric, vessel movement through the Strait of Hormuz remains curtailed, and that prolonged disruption is what’s keeping oil risk premiums elevated,” said Phillip Nova’s senior market analyst Priyanka Sachdeva.
Shipping data highlighted ongoing disruptions, with six Iranian oil tankers reportedly forced to turn back due to the U.S. blockade.
However, one liquefied natural gas tanker operated by Abu Dhabi National Oil Co successfully transited the Strait and is believed to be near India, according to tracking data released Monday.
Before the outbreak of the U.S.-Israeli conflict with Iran on February 28, between 125 and 140 vessels passed through the strait each day.
Analysts suggest elevated oil prices could persist. Suvro Sarkar, head of the energy sector team at DBS Bank, sees a base-case scenario shifting from hopes of de-escalation to a prolonged ceasefire stalemate, with prices likely ranging between $100 and $125 per barrel.
“With no immediate deal and an indefinite ceasefire providing no certainty on whether the Strait is open or closed, oil prices will trend higher as physical markets catch up with paper markets. Eventually, the conflict will become ’normalised’ in financial markets, leading to less volatility but a higher baseline,” he said in an email.